Analysis

FX Replace – March 9 – Danger Averse Guidelines

USDJPY, H1

The Yen surged by over four% versus the commodity bloc currencies; huge intra-day actions by the requirements of buying and selling within the prevailing period as world markets slammed the risk-off button amid heightening panic concerning the world financial influence that the COVID-19 virus pandemic is having.

Oil costs had been hammered, diving by a staggering 30%-plus, with the WTI benchmark hitting a $27.34 low. A value conflict has damaged out between Saudi Arabia and Russia, with the previous unleashing output in response to the latter’s intransigence about trimming provide at a time of falling demand. The ensuing carnage in oil costs has exacerbated virus issues. USDCAD lifted over 1.5% to a 34-month excessive at 1.3758, and extra positive aspects appear possible if oil costs sustained weak spot, which might mark a major deterioration in Canada’s phrases of commerce. CADJPY fell to its lowest ranges since November 2011. AUDUSD, in the meantime, dove to a recent 11-year low at zero.6320, whereas AUDJPY additionally descended farther into 11-year low territory.

USDJPY dove by over three% to a 40-month low at 101.60, pushed largely by secure haven demand for the Japanese foreign money. The Greenback has been buying and selling blended, gaining versus the commodity currencies and most developing-world currencies, notably these of export oriented economies, whereas dropping floor to the Euro and Sterling. EURUSD rallied 1.eight% in posting a 13-month excessive at 1.1493, extending what has now been a 6.5% rebound from the 35-month low that was seen simply 18 days in the past at 1.0777. Forward, the key “identified unknown” stays how a lot the coronavirus spreads and the way a lot financial harm from containment measures there shall be earlier than it turns into clear that the virus is on the wane. These are good instances to be a long-term worth investor.

How will US markets react later? The money markets open an hour sooner than regular, for the subsequent three weeks as North America moved to the Summertime,  March eight 2020.

Click on right here to entry the HotForex Financial Calendar

Stuart Cowell

Head Market Analyst

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